Western Europe’s largest oil producer, Norway, will be ending the government-imposed oil production cuts at the end of the year, the Ministry of Petroleum and Energy said on Tuesday, while OPEC and its partners in the wider OPEC+ coalition continue to discuss how to proceed with the cuts next year.
Norway, which is not part of the OPEC+ coalition, is cutting its oil production because of the slump in demand and prices in the spring of this year.
Norway decided in April to reduce its crude oil production by the end of 2020, saying that the decision “has been made on an independent basis and with Norwegian interests at heart.”
In a bid to support global efforts to prop up oil prices and ease the glut, Norway decided it would cut its crude oil production by 250,000 bpd in June, and then maintain a 134,000-bpd lower rate of production for the rest of 2020. This is the first time Norway has joined oil production cuts since 2002. Back then, Norway reduced its production rate by 150,000 bpd over the first half of the year, after oil prices fell below $20 a barrel following 9/11.
While OPEC+ is busy this week debating the future of the coalition’s cuts as of January 2021, Norway said in a statement, as carried by Reuters, “The Norwegian regulation will expire at the end of the year.”
“Norway is not part of OPEC+ and is not invited to this meeting,” the petroleum ministry said.
Norway’s crude oil production in October 2020 averaged 1.611 million bpd, according to the latest figures of the Norwegian Petroleum Directorate (NPD). The production figures for oil in October include the cut of 134,000 bpd for the second half of 2020.
Two weeks ago, Norway’s giant Equinor said the huge Johan Sverdrup oilfield in the North Sea was increasing its daily production capacity, expecting to reach around 500,000 bpd by the end of the year.
By Tsvetana Paraskova for Oilprice.com
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